Gov. Scott Walker says there will be additional money available for public schools and cutting taxes in his budget, but he doesn't know exactly how much yet. / Gannett Wisconsin Media file

Written by

Scott Bauer

Associated Press

MADISON — Gov. Scott Walker said Monday it’s still unclear how much money originally targeted for the University of Wisconsin System will instead be diverted to pay for deeper tax cuts and to help K-12 schools.

Walker told reporters in his Capitol conference room that he’s still talking with UW officials about how much money is needed to pay for freezing tuition system-wide while also investing in economic development programs at the university he supports.

“I don’t know if there’s a specific number,” Walker said when asked how much would be set aside for public K-12 schools and tax cuts.

Walker said he would divert some of the $181 million he originally earmarked for UW amid the release of a report two weeks ago showing that the system had about $650 million in reserves at the end of the last fiscal year. UW leaders have said that number is expected to grow by another $150 million by the end of June.

One big factor in how much money there will be for a more significant income tax cut or additional funding for schools will be how the state’s tax collections are doing. A new estimate, which will shape the ongoing budget debate in the Legislature, was expected to be released this week.

Public school supporters, and even some Republican legislative leaders, have been lobbying for an increase in the revenue limit, which would allow schools to spend more. Walker is proposing freezing spending, so any additional money put toward school aids would help lower property taxes but not be available for use in classrooms.

State superintendent Tony Evers, who appeared with Walker at an awards ceremony and took questions separately after the event, said he thought school spending should be allowed to go up at least $150 per student in each of the next two years.

“It’s a good starting point,” Evers said.

Allowing revenue limits to increase $150 per student in each of the next two years, as has been proposed by Senate Education Committee Chairman Luther Olsen and Republican Senate President Mike Ellis, would cost about $289 million.

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The centerpiece of Walker’s budget is a $343 million income tax cut, which would save the average taxpayer $83 a year. Both Walker and Republican leaders have talked about using any additional money available to increase the amount of that tax cut.

Also on Monday, Walker said he was convening an emergency meeting this week of the board overseeing the state’s flagship job-creation agency to discuss a scathing audit that detailed dozens of missteps during its first year of operation.

Walker made creating the quasi-public Wisconsin Economic Development Corp. one of his top priorities when he took office in 2011, but the agency has had a troubling beginning. Last week’s audit detailed dozens of problems during its first year, including not following state law, failing to adequately track loans, and providing tax breaks to companies that didn’t qualify.

Walker said he wanted to go over the audit “piece by piece” with the board, which he chairs. The board is comprised of WEDC officials, business leaders and state lawmakers.

That meeting is set for Wednesday in Waukesha, the day before the Legislature’s Joint Finance Committee was scheduled to take up WEDC’s funding levels and the Audit Committee was to discuss the report from last week.

The four Democratic members on the Legislature’s budget committee have called for consideration of WEDC’s funding to be postponed until concerns raised in the audit are addressed.

Walker on Monday downplayed the audit while announcing he was calling an emergency board meeting. Walker said many of the points raised in the nonpartisan Legislative Audit Bureau report already were known and had either been fixed or were in the process of being addressed. He said he wanted to get a status update at the board meeting.

The audit resulted in a widespread criticism of how WEDC is being run, even from Republican Audit Committee co-chair Sen. Rob Cowles. Both he and Democratic Assembly Minority Leader Peter Barca, a member of WEDC’s board, said WEDC must show improvement or face being replaced with a public state agency like the Department of Commerce that preceded it.